60 S.W.2d 345 | Ky. Ct. App. | 1933
Affirming on appeal and reversing on cross appeal.
R.H. West was sheriff of Nelson county for the years 1926 to 1929, inclusive, and the Fidelity Deposit Company of Maryland was his surety. This action was brought by the commonwealth, for the use and benefit of Nelson county and the Nelson county board of education, to surcharge the settlements which West as sheriff made for the years mentioned. On final hearing the lower court awarded Nelson county the sum of $3,170.48, with interest, and the Nelson county board of education and the Boston consolidated school district the sum of $21,863.80, with interest. From that judgment the surety appeals.
1. It is first insisted that the sheriff was not chargeable with the amount of Louisville Nashville Railroad franchise taxes in the Boston consolidated school district, as these taxes were never certified by the auditor, and consequently were not owing by the taxpayer. The method of assessing railroad franchises *172
is as follows: All railroads are required to make certain detailed reports to the auditor of the state, and from these reports and hearings thereon the state tax commission values or assesses the franchise. Sections 4077 and 4078, Kentucky Statutes. By section 4084, Kentucky Statutes, the auditor is required to certify the valuations fixed by the state tax commission to the county clerk, and that officer is required to certify the valuations to the proper collecting officers. The Louisville Nashville Railroad might have declined to pay the taxes until the proper certificate was made. However, it did not wait for the certificate. The franchise had been valued and a proper levy had been made. The amount due the district was a matter of simple calculation. The railroad actually paid the sheriff the taxes due the consolidated school district, and he in turn accounted in his settlement for the taxes so paid. In no sense were the taxes so paid and collected illegal. The railroad owed the taxes, and they were accepted by the sheriff in discharge of its obligation. The money came into his hands by virtue or color of his office, and the statute makes the surety liable. Section 4027, Kentucky Statutes; Commonwealth v. Finch, 8 Ky. Law Rep. 961; Combs v. Breathitt County, 46 S.W. 505, 20 Ky. Law Rep. 569; Mason v. Cook,
2. The next contention is that appellant is not liable for the taxes collected by the sheriff for the Boston consolidated school district for the year 1926, as there was no valid levy for that year. The levy for the year 1926 was made by the county board of education. It is argued that the county board was without authority to make a levy to meet the ordinary expenses of the school. It is true that under the statute now in force levies for consolidated school districts are made by the fiscal court, and not by the county board of education, Kentucky Statutes, sec. 4426-2; Hockensmith v. County Board of Education,
3. There is also the contention that, inasmuch as section 4426a-9, Kentucky Statutes 1922, was expressly repealed by section 4426-2, Kentucky Statutes, enacted in the year 1926, which fixed the tax rate at not exceeding 75 cents on each $100 of property within the district, the fiscal court upon which the power of taxation was conferred was without authority to exceed the 75-cent limit. Whether or not the right to impose a tax not exceeding $1 on $100 worth of property, which had been authorized by the voters of the consolidated district, could be taken away by the Legislature in view of the fact that it was authorized in part to pay bonds that had been voted, we need not determine. The statute under which the vote was taken expressly provided that, "when such a tax is voted in such consolidated district for local school purposes it shall remain and be collected annually in accordance with the provisions *175 of law until repealed by a vote of the people at an election called and conducted in the same manner in which the tax was voted." In the absence of any provision to the contrary, and there is none in the repealing act, we conclude that the Legislature did not intend to affect the status theretofore created by taking away the right of taxation conferred by the voters of the district, which the Legislature plainly intended should continue until repealed by the voters at an election called and conducted in the same manner in which the tax was voted. Kirk v. Roberson, 76 S.W. 183, 25 Ky. Law Rep. 633. Furthermore, the power of the fiscal court for the years in question to levy and collect common school taxes, and also consolidated school taxes in a consolidated school district, cannot be doubted.
4. Lastly it is insisted that appellant as surety is not liable for the sum of $55.31 which the county claims through error it overpaid the sheriff for the year 1926. As we view it, the question of overpayment in any particular year is not involved. The purpose of the action is to surcharge and correct all the settlements made by the sheriff and determine the amount due by him. The evidence shows that, in addition to other sums, the sheriff still owes the $55.31, and we see no reason to disturb the judgment so far as that item is concerned.
5. On the cross-appeal it is insisted that the sheriff should account for a 6 per cent. penalty on all school taxes for the years 1928 and 1929, as required by section 4147, Kentucky Statutes, and also for the penalty and interest provided by section 4148, Kentucky Statutes, on all taxes not paid by December 31st in those years. It is true that in a sense school taxes are state taxes, City of Louisville v. Board of Education,
In the recent case of Clarke v. Commonwealth,
However, it is at once apparent that the same conclusion cannot be reached respecting the penalty and interest provided for in section 4148, Kentucky Statutes. Under that section all state, county, and district taxes, except as otherwise specially provided, not paid on December 31st of each year after the same are due, are deemed delinquent, and bear interest at the rate of 6 per cent. per annum from that date until paid, together with a penalty of 6 per cent. Moreover it is made the duty of the sheriff to collect the interest and penalty and account for the same in the same way in which he is required to collect and account for the taxes. This statute leaves no room for argument. The words of the statute are "all state, county and district taxes." This language embraces all taxes whether imposed by the state, county, or a district, and therefore includes school taxes. Indeed it was pointed out in Clarke v. Commonwealth, supra, that section 4148, Kentucky Statutes, applied to all taxes, and that the sheriff was responsible for the penalty and interest therein provided, but that the petition in that case did not seek a recovery therefor, and the record was not so prepared as to enable the court to determine the amount. In this case, however, a recovery of the penalty and interest is sought, and the case has been prepared so that the amount thereof may be fixed. We therefore conclude that the court should have included in the judgment the interest and penalty on school taxes for the years 1928 and 1929. Fidelity Deposit Co. v. Logan County,
The appeal of Muir, Wilson Muir, a banking institution, first challenges the correctness of that portion of the judgment ruling that the surety company on payment of the indebtedness was entitled by subrogation to a lien on certain real estate owned by the sheriff, and that this lien was superior to a mortgage held by them. The statute gives the commonwealth, the county, and taxing district a lien from the date the sheriff begins to act upon all his real estate until the whole amount of money collected by him, or for which he may be liable, shall have been paid, section 4130, Kentucky *177
Statutes, and a surety who pays the commonwealth, county, or taxing district is substituted to its lien upon such real estate. Dawson v. Lee,
The appeal of the Muir, Wilson Muir Company, also challenges the correctness of that part of the judgment directing that, when the judgment rendered against West and the surety company shall have been satisfied by the surety company, Muir, Wilson Muir should pay the surety company the sum of $595.62. It appears that this sum is on deposit to the credit of West as sheriff, and represents taxes collected by the bank on behalf of West. If not in fact the property of the county and county board of education, it cannot be doubted that with respect to them the deposit is a trust fund, Hill v. Flemming,
On the appeals of Fidelity Deposit Company of Maryland and Muir, Wilson Muir, the judgment is affirmed. On the cross-appeal of the Commonwealth v. Fidelity Deposit Company of Maryland, the judgment is reversed, and cause remanded, with directions to enter judgment in conformity with this opinion.
Whole court sitting except Judge Richardson.